FORMER city council chief executive Dame Sue Bruce has denied the sum of money paid to contractors to get the troubled tram project back on track was a “fag packet” figure.

Giving evidence to the tram inquiry, she insisted the £362.5m agreed at mediation talks for the off-street works between the airport and Haymarket was based on the history of the project and the work still to be done - despite the absence of any document breaking down the costs.

Former City of Edinburgh Council chief executive, Dame Sue Bruce

Dame Sue led the council’s team in the talks with construction consortium Bilfinger Berger Siemens at the luxury Mar Hall hotel near Glasgow in March 2011, aimed at resolving a long-running dispute which had seen the tram works grind to a halt in Princes Street.

She told the inquiry: “The city was dug up, there were holes all over the place, there was no work being done, there was a lot of media commentary, the city was in a bit of a state and nobody seemed to know where this was going.”

After a series of offers and counter-offers the two sides at the Mar Hall talks agreed a new deal which included the £362.5m payment for off-street works.

Inquiry counsel Jonathan Lake QC said there was no documentation showing how the sum had been arrived at. And he suggested to Dame Sue: “It was just what had to be paid to get rid of the problem. Is it not fair to say it was a fag packet figure?”

She replied: “No, I don’t think it is fair to say that.” She said the figure took into account the outcome of adjudications on disputed parts of the project, work that had already been done, calculations by the council’s tram firm TIE and the negotations on the day. “All of that built up into the final figure.”

The inquiry also saw a report which noted that if the council had opted to cancel the project altogether, it would have cost £161m in a single year and force a council tax rise of 80 per cent. Dame Sue said: “It’s not something I would have recommended.”

Join our Facebook group Our Edinburgh to share images and news from and around the Capital